Interestingly, we didn't have much debt because I watched it like a hawk and loved paying the debt off. Before we moved back to the States last May, we were a couple grand in the green and none in the red. After moving back, it's been a constant struggle. First I had a job, then I was laid off. I didn't use my credit card ONCE while I was laid off and really pinched my pennies. I was doing so well once I finally had a job but guess what happened? My debt went up, up, up. WTF?!
So now, I'm struggling to be debt free yet again. I want to be able to save money to buy a new car in a few years and put a down-payment on a house. I just don't understand how I could be so irresponsible to get back in this position but I'm hitting it head on.
I've been searching the net for ways to reduce spending. So you're thinking, well, duh. Just stop. Yeah, it's pretty easy to do that, but I'm going to go back to the way I used to handle debt. I think the main problem is that I'm paying rent. BOOM $600 down the drain on the first of the month and that, well, sucks. I'm trying to find my groove with my new found income so I'm floundering right now.
Here are my own tips and hopefully they can help you achieve a debt-free lifestyle. Obviously most of these you've heard before, but this works for me. If you have some good tips to share, please do. I still haven't managed the dreaded "B" word (budget) but I'm going to try, yet again.
- Pay yourself first. Always allot at least 10% of your income into a high interest savings account like ING Direct.
- Attack the highest interest rate and pay the most money on it. I have two credit cards, one with zero percent interest for 18 months and one with pretty decent interest rate. I pay a little above the minimum on my zero percent interest and throw a big chunk at the higher card; why put a lot towards something that won't accrue interest until after 18months? The plan is to pay it off before that period is up and the extra money on my other card will lower the balance.
- Tithe. I donate money every single month to one of my favorite animal charities, the ASPCA. I know, you're thinking, if you want to pay your debt off, aren't you better putting that money towards your debt and THEN to charity? Uh uh. I always believe you have to give to receive and to know that my money every month will benefit animals, I'm willing to make that sacrifice.
- Do the envelope trick. I ALWAYS pay with my debit card, I love it and couldn't live without it. The problem with that is one doesn't see where the money is going and it is a lot easier to spend. By labeling envelopes such as "Groceries" and "Fun Money" you put the cash in the envelopes allotted for that month or two week period. When the money is gone, it's gone and you have to either wait till next pay period or learn to spend more wisely. When I was married we gave each other $40 for two weeks. This counts for snacks, magazines, clothes, etc. Once it's gone, it's gone. It will really make you think twice about buying that magazine.
- Look for ways to make money and I don't mean open up a lemonade stand. Gone are the days were people sold items on ebay for money. Now don't get me wrong, you USED to be able to make money on there, but now that executives have become so greedy, it's no longer the way to make quick cash. Craigslist on the other hand, yes. Why is Craigslist better than ebay IMHO? Well first and foremost, it's free! You can list your items on there as long as you like at no charge to you and no stupid fees. Another benefit is that you don't have to wait for payment or ship the items out, you have the person come pick up the item for you. Most cities have a Craigslist, check it out, list your stuff, make some cash.
- Really think about an item before you buy it. I mean overnight, not five seconds later. If you still want it after 48hours, then buy it. But giving yourself some time to think about an item, it allows time for you to reflect on what you're looking to buy.
I hope this helps! I'm excited to be debt-free once and for all. Onward and upward!